Ask yourself these four questions while you stare at this hair ball.
Are your beneficiaries current? Check your personal estate plan, life insurance and retirement assets.
Do you give to charity? Think about starting a family foundation if you regularly make large charitable donations. Consider donating appreciated assets like stocks to avoid capital gains tax. Look into a donor-advised fund to receive a charitable deduction today, avoid capital gains tax and retain the authority to determine its future use.
Have you made a gift to your family lately? Establish a long-term strategy and give annual gifts to your beneficiaries to easily reduce a potentially taxable estate; the maximum is $14,000 per person. There is no limit on how many gifts you can make, and there is no gift or estate tax. Couples can combine their gift giving for up to $28,000.
Have you created or updated your key legal documents? Meet with your estate planning attorney create or review your health care proxies, powers of attorney, and will.
As I was packing up for the day, getting ready to leave the office, I received a call that a 72-year old woman in the care of hospice was ready to prepare a trust and express her dying wishes. Assembling the necessary forms, I knew that at this stage of her disease this process would be stressful on her and those around her. Not exactly, how one expects their last days to be.
You know the many reasons for creating a trust, preferable over a will – it’s a private record not a public one, the fees are less; and decisions can be made without judicial approval.
When I arrived at my client’s home, I found her under the effect of morphine and possibly incompetent. It was necessary to secure a doctor’s evaluation that she indeed was competent before we began. Luckily, in this case, her estate was a manageable size and she had only one adult child. Yet we faced daily challenges until the trust was notarized. There were times when she was too ill or asleep and could not meet. At times, we thought she might become incompetent (she didn’t). And every day we didn’t know if we’d lose her before the work was done. After five days of constant contact with her son, meeting with her privately, and traveling back and forth to her home at all hours – the trust was completed. The next day she died.
Don’t put yourself and your children through this. Meet now not tomorrow with an estate planning attorney and complete your trust. This way your last days can be spent sharing precious memories with your loved ones, gazing out the window, and saying final good-byes to the important people in your life.
The woman who made a little white Maltese the richest lapdog in the world ($12 MM, later $2 MM) is back in the news, or rather her multi-billion dollar estate is. The estate of Leona Helmsley, the Queen of Mean, has been charged a $100 million fee by its executors. According to court papers filed by the New York Attorney General’s office in January -- a mind-boggling fee of $6,437 an hour or $250,000 per month was claimed by each of the four executors. One of the executors, a former paramedic, is said to have charged $1 million just for sending emails over a 10-month period.
While we wait with bated breath for the court’s ruling, let’s take a look at our more modest lives to understand what a fiduciary (also known as an executor, personal representative or trustee) does and how compensation should be determined.
Fiduciary responsibility is given to someone who is trustworthy, organized and fair. Much will be asked of this person – it’s not for the faint of heart, especially when it comes to handling family issues as well as financial ones. After a loved one’s death, the fiduciary will see to it that assets are gathered, business affairs settled, debts paid, necessary tax returns filed, and assets distributed as the deceased directed. It is a lengthy, time-consuming and often difficult process. It also exposes the fiduciary to personal liability should there be any errors or mismanagement of the trust or estate.
If you serve as an estate executor, here are a few things not to do from the Wall Street Journal:
Don’t pay bills too quickly
Don’t “play the market” during the estate-settlement process
Don’t succumb to family pressure to make distributions too soon
Some wills or trusts will include a compensation fee amount. If not, many states either provide a fixed schedule of fees or allow "reasonable" compensation, which usually takes into account the size of the estate, the complexity involved, and the time spent by the fiduciary. With Helmsley’s will, the fee wasn’t clear.
Settling an estate is a job – being paid establishes your fiduciary’s authority.
Getting your will/trust done is a serious business. Yet, for some, it also can be an opportunity to do something uniquely special for loved ones from the grave.
Legendary comedian Jack Benny is said to have left instructions in his will that his wife was to receive one long-stemmed red rose every day for the rest of her life. One fellow in the U.K. set aside $5,000 for his friends to enjoy a boys weekend away. Another stipulated in his will that funds were to be used to plant a million flowering bulbs in his favorite town.
No matter the instruction – serious or sentimental, a will/trust is the only way you can be sure your beneficiaries receive what you want, when you want. Without one, the state will dictate what happens to your possessions and assets once you pass away.
More than most, I understand that it’s difficult to consider your final wishes and instructions – every day I speak with people who would rather be anywhere than meeting with me. However, these discussions need to take place.
Last month on Christmas morning, we had a fun time making our kids “work” for their big present. They were given instructions for a scavenger hunt – they were required to take photos with a friend’s dog, a sleepy teenager, Blackie’s statue, a shell on the beach, and other things. The kids drove around town together, and after we laughed at the funny photos – they received tickets to a popular band, Maroon 5.
Now, I’m not proposing you should send your beneficiaries on a scavenger hunt, however, tempting that may be. What I am saying is that tucked with the volumes of legal language in your will/trust could be something special for them to remember you. For me, my wife has asked for a massage once a week for the rest of her life.